Taoiseach Leo Varadkar may link dole payments to people’s employment history while simultaneously cutting tax for middle and high income earners for the next three years under controversial Government proposals.
The dole system plans were outlined in sections of Fine Gael’s new “rolling manifesto” obtained by the Irish Examiner as Mr Varadkar confirmed the de facto income tax cuts for better off workers over the next three years.
Speaking during his live TV broadcast on the first night of the Fine Gael national conference, Mr Varadkar said he will raise the point at which people start paying the highest rate of income tax for each of the next three years.
“In the budget, we raised the standard cut-off point [for the highest rate of tax], and we will do so again in the next one — and the one after that — and the one after that,” Mr Varadkar said.
The move follows last month’s budget decision to raise the same entry point to €34,550, helping middle to high income earners who are key to Fine Gael’s future general election hopes.
However, it is likely to be heavily criticised by Fianna Fáil, as it was not part of the tax cuts to spending ratio agreed under the confidence and supply deal.
The middle and high income earners tax changes come as Fine Gael is separately considering plans to drastically change Ireland’s dole system by linking dole payments to PRSI contributions.
The proposed system is used in France and other parts of continental Europe, where unemployed claimants receive payments based on their previous social insurance contributions.
While the policy, which remains under consideration, is intended to better support people who have recently lost medium-to-long term jobs, it also means the long-term unemployed will receive lower payments.
Fiachra Ó Cionnaith and Juno McEnroe – Irish Examiner